Housebuying - what is the bidding process like? How do I make a bid effectively.

March 31, 2007 12:20 PM

I think we might have found "THE" house for my mother to retire in. She has spent her whole life living my father's life and for us "kids". Never came close to enjoying any of the things that interest her. So she wants her home in the country in upstate NY. DH and I have been dedicating weekly trips upstate to help her find this home. We've recently decided to check out Chengango County. Based on pictures, this house looks and sounds great. We're not worried about cosmetic work and will naturally look into the structure of the home and land. Is there anything else I should look for?

Thing is...their asking price is about 100k more than the budget set aside. Let's just say for arguments sake the structure of the house is sound with very minor cosmetic work...and given the direction the market is heading, how much less do you think I can bring the asking price down to? What is the process when making a bid? I know I'm jumping the gun sight unseen, but I thought I'd ask anyway even if this ends up not being "the one". I've never done this before and I don't want to mess things up for my mother. TIA!

posted by Jujee to home & garden (11 comments total)

If she's living alone in the country, I wonder if she could become socially isolated. That's what I would be worried about.
posted by Steven C. Den Beste at 12:43 PM on March 31, 2007

Yeah, if it's the house for her to retire in, access to services and community is key (does she drive? what happens if she stops driving? where is the nearest doctor who accepts her insurance? who can she call if there is a problem? etc) And, will she be able to walk or get around in the winter? Snow and ice can be real problems for seniors.

With houses, I feel that location matters more than condition -- you can tear down and rebuild a house with a poor design, but you can't move the whole neighborhood.

How much you can go down (or up, although that would be unusual in this softening market) in price will depend on very local questions --- location, condition, desirability, whether the local economy is improving or slumping, etc.

The specifics of making a bid: generally you would have your own real estate agent (some people suggest having a buyers agent), and they communicate your offer to the seller's agent. There is usually a back and forth process, with lots of pieces of paper and varying sets of conditions. (That is, you might make your offer conditional on the house passing inspection and on you securing a loan, say.) In New York state I believe it is common to have lawyers involved, at least at the end of the process, but that may vary by location. Quite early on (as in, before you settle on a house) you will want to begin discussions with mortgage providers, to get a sense of what you would be allowed to borrow, under what conditions.

I'm sure this has been asked, and answered, before; you would also do will to pick up a copy of "house buying for dummies," or whatever the title is.
posted by Forktine at 12:57 PM on March 31, 2007

Although you say there isn't much work to be done, you would do better to tie your lowered asking price to specific problems. Just putting in a lower bid may not get the same attention as saying that you're putting in a lower bid because the roof needs replacing, or the carpets all need to be torn out. It may make the buyer feel that any future offers will also be low for the same reasons, so they may as well accept your offer now. Just be careful not to insult their taste in carpeting when you do this.

Your realtor will be your friend here, and can definitely advise you about how the market in the County is. If this house has been on the market for awhile, then you'll have more leverage for putting in a low offer as well. If the house comes with extra land, you could try to lower the price by asking just for the house and a smaller lot.

It's funny that I'm looking for a house in up-upstate NY, where $100,000 will buy the whole house with enough leftover to buy a car too.
posted by saffry at 1:08 PM on March 31, 2007

Pay for a structural inspection, first of all. This is ammunition in bringing the price of the house down.

Then submit your maximum offer, but make it perfectly clean (ie no conditions on financing, or inspection) with the earliest closing that is practical.

That's really all you can do.

Mostly it depends on how the house is priced relative to the market. I once bid $210,000 on a house that was priced at $270,000 (because that was what it was actually worth). The owner said he was 'insulted', and rejected it. He later increased the price to $350,000. The house, needless to say, hasn't sold and has sat on the market, empty and depreciating, for three years. Shrug.
posted by unSane at 1:13 PM on March 31, 2007

I grew up in Chenango County, and my parents still live there. Things to watch out for:

1) Property taxes are breathtaking -- 3.5-5% of "full value" in most parts of the county (although there are various exclusions, too). Oh, and the sales tax is 8%, and NY income tax is no walk in the park. All of my tax rates in "Taxachusetts" are a good chunk lower than what they'd be in New York.

2) Do you know about NYRI and how it might affect the house you're considering?

3) Do you know about last year's major flooding and the constant threat of major snow/ice storms? People deal with this stuff, but it can be a real shock to urban dwellers when the basement unavoidably floods every spring, or when the country closes the roads for the day during a nasty storm.

4) Find out where your water comes from and where your sewage goes to. The answer to both questions may be "the river out back" -- I'm not kidding. Remember that you'll need a plan for power outages if you have an electric well pump.

5) There's been a major influx of, um, brash new people (universally called "downstaters") and speculators in Chenango County in recent years, so don't expect a warm welcome. At the same time, I don't think it's any less welcoming than anywhere else when you're new. It will help if you don't freak out about some of the normal parts of country life, like hunting, snowmobiling, and slow farm vehicles.

6) All that being said, it's a great place to live.
posted by backupjesus at 1:44 PM on March 31, 2007

Seconding Forktine -- accessibility of services is more important than the building. If her dream is a really rural location, is there a bus service? A small town location may enable her to live independently in her own home for longer. You may be thinking she will move again when she grows older, but people often remain in their familiar home while their children grow more and more worried about their ability to cope.

Does your mother make friends easily? Again, living in a small town may make that easier than living out in the sticks -- where the choice of which neighbours you find congenial is more restricted.
posted by Idcoytco at 2:08 PM on March 31, 2007

It's not really feasible to live in Chenango without driving, and those who do only do so due to extreme poverty or with the benefit of deep community connections. There's a bus service, but it is extremely limited. For a period of time a few years back, Norwich, the country seat and only "city" in the county, had no supermarket that could be reached by sidewalk; those who couldn't drive or take the bus had to walk on the sholder of a state highway.

While my parents live in a small town and have lots of friends there, they also have lots of friends from other towns and the boonies. As long as you're willing to drive to community events to make friends, I don't think it matters whether you live in town or not.
posted by backupjesus at 2:31 PM on March 31, 2007

Please pick a community where it will be safe for her to walk when she is no longer unable to drive. Not just safe regarding sidewalks and traffic, but distance as well.

There is a body of work that suggests difficulty in old age is very closely linked to a sense of agency. That is, for folks who cannot take care of themselves, life becomes not worth living.
posted by bilabial at 2:58 PM on March 31, 2007

The winters upstate can be brutal.

My friend's mom lived upstate for a few years but retreated back to Hudson because the country was too isolating, and the winters were very difficult. She loves Hudson - perhaps you should check it out?
posted by maggiemaggie at 3:13 PM on March 31, 2007

Get a licensed real estate agent to help you out. Preferably someone who knows the area and local market. This person will get you inside to see the house (it might not be all that once you see the rooms), walk you through the bid process, already knows an inspector, will alert you to potential pitfalls, and above all will make sure everything is done legally. And it doesn't cost you anything up front. She gets paid a percentage from the deal from the sellers at closing.

Do not buy a house based on pictures unless it isn't built yet!
posted by ilsa at 5:00 PM on March 31, 2007

If a house has more than one story, make sure that there is a full bathroom on the first level and the option to eventually have a bedroom on the first level as well. My husband's very independent 80 year old grandmother had to move from her home into a retirement apartment complex only because it became too challenging for her to walk up the stairs to use the only bathroom in her home.

Also make sure that there are options for someone to take care of snow removal and lawncare if she isn't up to it. If she drives, a garage for her car will be nice, so she doesn't have to scrape ice off it in winter. A good nearby grocery store and pharmacy will be helpful.
posted by pluckysparrow at 9:39 PM on March 31, 2007